The former head of NPR's fundraising arm says in a surreptitiously recorded video by a conservative activist that members of the tea party movement are xenophobic and racist and that NPR would prefer to do without subsidies provided by the federal government.

In the video, released Tuesday morning by conservative filmmaker James O'Keefe, NPR executive Ron Schiller disparages conservatives in general and tea party members in particular, saying that some of its followers are part of an "anti-intellectual" movement.

By the end of the day, Schiller, who had been planning to leave in May as head of the NPR Foundation, issued an apology for his remarks and agreed to resign immediately.

Schiller and another NPR fundraiser, Betsy Liley, believed that that two of O'Keefe's operatives were representatives of a Muslim philanthropy. The video was shot at Cafe Milano in Georgetown during a lunch meeting set up to discuss a $5 million contribution to NPR by the equally fictitious Muslim Education Action Center, which one of the men tells the NPR executives is connected with the Muslim Brotherhood, a political organization with suspected ties to terrorists.

On the video, Schiller says: "The tea party is fanatically involved in people's personal lives and very fundamental Christian - I wouldn't even call it Christian. It's this weird evangelical kind of movement."

He goes on to say that NPR "would be better off in the long run without federal funding."

The latter sentiment is often expressed privately by people at NPR, who would prefer that the news organization have no financial ties to federal sources. As Schiller says in the video, however, federal funding forms an important part of the budget of NPR's affiliated stations and elimination of it would hurt many stations.

NPR itself receives only about 2 percent, or $2.4 million, of its annual budget in direct grants from the federally chartered Corporation for Public Broadcasting. Its member stations, which pay programming fees to NPR, receive a much larger share of their operating budgets - about 15 percent on average - from Washington.

Nevertheless, O'Keefe's video caused an instant sensation Tuesday in the conservative blogosphere and represented a public-relations embarrassment for NPR, which is fighting Republican-led efforts to eliminate Washington's contribution to public radio and television, which totals $430 million this year.

In response to the video late Tuesday, NPR spokeswoman Dana Davis Rehm said: "The comments contained in the video are contrary to everything we stand for and we completely disavow the views expressed. . . . The assertion that NPR and public radio stations would be better off without federal funds does not reflect reality."

O'Keefe has become a hero in conservative circles for "undercover" stunts that capture employees of allegedly liberal organizations making embarrassing statements.

Schiller, who is no relation to NPR president Vivian Schiller, announced last week that he was leaving the organization to join the Aspen Institute, a public policy think tank, but he had been expected to stay on for several more months. NPR said his planned departure was unrelated to the video, which was shot Feb. 22.